insurance company startup???!!!?

Question

was wondering about the possibility of starting up my own insurance company covering cars. do i need a license to do this. do i have to make myself known to anyone that i am insuring people to drive, eg :- government, police?

any help would be appreciated

Answer 1

As this is appearing in a UK forum my reply is UK oriented. If you are a Brit I'd suggest ignoring the stuff about licences, agents and states as this sounds US, and whilst it may be correct it is not relevant!

First, do you mean an insurance company or an insurance intermediary. The former creates insurance policies and underwrites the risk. They're the firm that pays the claim. The second sells the policies provided by other insurance companies.

For both you'll need approval from the Financial Services Authority - and you'll need to comply with their regulation.

If you're an insurance company you will need to demonstrate you have adequate financial resources. That means having money set aside to pay the claims you expect to have to pay (or reinsurance contracts). You will need to demonstrate to the FSA that you have a sound underwriting model.

You will also need to obtain approval from the Department for Business, Enterprise and Regulatory Reform (formerly the DTI).

In both cases they will consider whether you are a fit and proper person to own and run an insurance company.

Depending on what you're doing you'll also need to register with the Information Commissioner's Office for Data Protection purposes, you may have to register with the Department for Justice depending on what you do with your claims, and you may also be contributing data to various government and industry databases when you sell an individual policy or receive a claim.

There are also specific pieces of legislation that cover motor insurance that will affect the way you construct your policies.

If you plan on selling other people's policies life is easier than this, but still complex. The FSA and ICO registrations remain, however, you won't be supplying data to fraud registers etc. Your requirements for solvency will be lower, but you will have responsibilities relating to the sale of the products you provide.

Good luck!

Answer 2

I would suggest getting an indepth knowledge of the insurance business. Attempting to start an insurance company (the company is who provide the insurance policy) is a complex business venture that requires millions of dollars and is highly regulated by the state where you want to sell policies.

You probably mean an insurance agency (agencies sell the policies of insurance companies to the public). Agents need to have a license from the state where they want to sell policies. Also, insurance companies will check into the background of the agents prior to allowing them to sell their policies.

If you are interested in a career in insurance, you really should go get a job with an existing agency of company. Selling insurance isn't like selling cars, etc. You are selling your knowledge and a promised to pay when needed. To be successful, you need to gain this knowledge.

Answer 3

Unless you have about £10,000,000 assets and copious re-insurance I would forget it. You also need DTI approval as well as FSA approval as well.

And that is before you have marketing costs, set up costs and can you really offer better underwriting than the current insurers (of which there are too many) without access to the various databases for claims statistics?

No one is making money out of car insurance believe it or not!

Answer 4

I 'd say forget it unless you want to be an independent agent.
I try and get a job with an insurance company first and learn the trade

Answer 5

yes you would have to register with FSA financial services as all general insurance is now regulated.

Answer 6

yes you need an Insurance License.

Answer 7

Start it up but beware of the 'crash for cash' scams. The police are well hot on this.